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Wednesday 14

November, 2018 9:30 AM



US stocks end sharply lower as rally fades

US stocks end sharply lower as rally fades

Wall Street stocks ended decisively lower Monday after an early rally fizzled and was replaced by aggressive selling amid worries over slowing earnings growth.

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30.10.2018 08:09 AM

Wall Street stocks ended decisively lower Monday after an early rally fizzled and was replaced by aggressive selling amid worries over slowing earnings growth.

The Dow Jones Industrial Average dropped 1.0 percent to 24,442.92, after experiencing a swing of more than 900 points between its session peak and nadir.

The broad-based S&P 500 shed 0.7 percent to end at 2,641.25, also recovering from its worst point of the day, while the tech-rich Nasdaq Composite Index lost 1.6 percent to close at 7,050.29.

US stocks opened firmly higher, but the rally began fading in late morning before turning sharply negative in the last 90 minutes of trading. The Dow was down more than two percent and the Nasdaq more than three percent before staging a partial comeback before the finish. 

"The inability of the market to hold the rally is keeping people out of the market," said Karl Haeling of LBBW, who said uncertainty over the upcoming congressional elections was adding to the skittishness.

"As we get to the November 6 election, people don't want to do anything new on the market," Haeling said.

Large technology companies were among the weakest group, with Amazon slumping 6.3 percent, Google-parent Alphabet 4.8 percent and Netflix 5.0 percent.

The S&P 500 has lost more than nine percent in October amid worries that US corporate earnings have peaked and rising US interest rates will slow the economy.

Analysts also pointed to a midday report from Bloomberg News on Monday that President Donald Trump's administration plans more tariffs on China if talks between Trump and Chinese President Xi Jinping next month are unsuccessful.

Stocks have fallen even though most US companies have reported better than expected earnings.

"This is an ominous sign for the market," Morgan Stanley said in a research note. "Investors are shrugging off solid numbers as concerns about future earnings mount." 

Dow member IBM dropped 4.8 percent after announcing a $34 billion takeover of open source software company Red Hat, while Red Hat surged 45.3 percent.

Fellow Dow member Boeing dropped 6.5 percent following a fatal crash of all 189 passengers operated by Indonesian Lion Air on a Boeing-737 MAX. Boeing is seen as vulnerable to further tariffs if the US-China trade dispute worsens.
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